It's been an afternoon of terror for traders betting against Tesla

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He cited SpaceX as an example and said it is "far more operationally efficient" because it is a private company. In a Bloomberg report following the tweet, the publication quoted Musk as having said in 2015, "There's a lot of noise that surrounds a public company and people are constantly commenting on the share price and value.Being public definitely increases the management overhead for any given enterprise".

Trading in Tesla was halted at 2:08 p.m. ETpending the release of news.

Elon Musk has said taking Tesla private would provide the company with an "enormous opportunity". Trading was temporarily suspended, but Tesla stock closed at $379.57 (£293.33 / €327.25) which is an increase of almost 11 percent.

Asked on Twitter whether Musk would continue to be CEO under such a scenario, he replied there would be "no change". As he explained "Being public ... subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term".

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The Silicon Valley company faces a make-or-break moment in its eight-year history as a public company as competition from European automakers is poised to intensify with new electric vehicles from Audi and Jaguar, with more rivals to follow suit next year.

He also said he intends to give Tesla's existing shareholders the option of retaining a stake in the company through a special fund.

Musk said he wouldn't sell his stake if the company went private.

In the letter, Musk lays out several reasons prior companies have left the public sphere: The quarterly earnings reports that may distract from a long-term picture, and scrutiny from short sellers. This is not to say that it will make sense for Tesla to be private over the long-term. "I own about 20 percent of the company now, and I don't envision that being substantially different after any deal is completed", he said. He said in his letter to employees that he did not seek to expand his ownership. Before Musk's tweet, Tesla had a market value of $58 billion, already higher than that of General Motors or Ford, even though those companies are significantly larger and more profitable. But he says any deal would be structured so that shareholders could opt to remain investors or be bought out at $420 per share.

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Elon now owns about 20 percent of Tesla and so he would need something like $50 billion in additional capital to fully privatize the company, along with a shareholder vote of "yes" to the move.

What on earth is happening to Tesla stock today?

Tesla shares spike after CEO tweets about taking carmaker private. Fidelity, the investment firm, has such a fund for its stake in SpaceX, a separate private company also run by Musk.

"As the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company", Musk said. The PIF is at the center of Saudi Arabia's efforts to diversify revenue away from oil under an economic transformation plan known as Vision 2030. The news, first reported by the Financial Times, sent Tesla shares up about 5 percent. Should the funding disclosure turn out not to be true, it could be viewed as "misleading", he warned. It now yields 6.75 percent versus more than 7.7 percent in early April.

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Tesla shares have been on the upswing since it reported on August 1 a bigger-than-expected second-quarter but signaled that it expects to reach profitability in the third quarter and remain in the black for the foreseeable future.